Italian Prime Minister Mario Monti opted on Friday not to rush a heavily contested labour reform through parliament after running into strong resistance from unions and a key ally supporting his government. After more than five hours of discussion in cabinet, the government said it would send a regular draft bill to parliament rather than an immediately applicable emergency decree. The move will mean that it could take several months for parliament to approve reforms that include a measure to loosen restrictions on companies firing workers and opens the door to potential changes by lawmakers.

Had the government opted for an emergency decree procedure, it could have implemented the measures immediately, fast-tracking subsequent parliamentary approval within 60 days. The reform is being closely watched as a test of Monti's ability to push through far-reaching changes to Italy's sluggish economy and provides his first real political challenge since coming to power four months ago.

He has already passed spending cuts, tax hikes, and a tough pension reform and measures to deregulate the economy without much opposition but has run into stronger resistance over the labour reforms which opponents say risk triggering a wave of layoffs. On Wednesday, Italy's six-million strong CGIL trade union called 16 hours of strikes, including a full-day nationwide stoppage, to protest against the measures which will weaken rights won during the heyday of union power in the 1970s. The union is particularly angered by a proposal that would reduce the obligation on companies to re-hire workers deemed by a court to have been wrongfully laid off and allow employers to offer monetary compensation instead.

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Jobs minister fears for life as labour market shaken up

There must be times when Elsa Fornero feels she has the world's worst job.When the 63-year-old stepped out to buy a new pair of shoes last weekend, she was accompanied by no fewer than 10 police officers: six plainclothes bodyguards and another four to close off the pedestrian precinct in Turin where she went shopping. There are anti-mafia prosecutors who get less protection. But then Fornero is Italy's welfare and employment minister, and the architect of labour reform laws that were approved by the cabinet on Friday. Among other things, it will now be easier for bosses to axe workers in an economic downturn. The last full-scale attempt to free up Italy's labour market was 10 years ago. The man behind that reform was Marco Biagi who was shot dead by the self-styled New Red Brigades.

Three years earlier, the same group murdered Massimo D'Antona, another academic who was the adviser on employment law reform to the then centre-left government. Clearly, some people feel Fornero, an economics professor at the University of Turin, should meet the same fate: a demonstrator was photographed earlier this week outside parliament in Rome wearing a T-shirt with the slogan "Fornero for the cemetery". The New Red Brigades, several of whose members had links with the most extreme wing of the trade union movement, have since been dismantled. But labour law reform remains Italy's hottest political potato. A two-tier labour market divides virtually un-sackable, mainly older workers in indefinite employment from younger ones hired on an endless succession of short-term contracts that offer them almost nothing in the way of welfare benefits. The Fornero reform also includes measures to encourage bosses to give younger people apprenticeships, which guarantee modest welfare benefits and offer the chance of a long-term engagement.

The minister behind it has shown a rare - but seemingly unwished for - ability to attract attention. In December, she broke down in tears at a press conference as she announced an end to inflation-indexing for all but the lowest pension bands. The move was later reversed. An overhaul of the employment laws was among the undertakings made to the EU institutions last year by Silvio Berlusconi's government in return for ECB intervention in support of Italy's then-beleaguered government bonds.

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More bodies found in Concordia cruise wreck

Search crews found five more bodies in the wreck of the Costa Concordia cruise ship, which struck a reef off an Italian island in January, officials said Thursday. The discovery rises to 30 the number of bodies found. Two people remain missing and are presumed dead. The latest bodies were all found in spaces between the hull and the seabed off the Tuscan island of Giglio, according to the Italian Civil Protection agency, which is coordinating search operations. Since the Jan. 13 capsizing, the Concordia has been lying on its side, half submerged in water near Giglio's port.

No details were given about the victims. Earlier, Franco Gabrielli, the official coordinating the search and salvage efforts, told reporters on the island that bodies were spotted when divers were working to set up a robotic device to search otherwise inaccessible parts of the wreck. The bodies were seen "in the spaces between the hull and the seabed," Mr. Gabrielli said. He added that it would take several days of work for the bodies to be removed. All of the other bodies before Thursday had been found inside the ship, except for three found in the sea near the ship in the first hours after the Concordia capsized.

The ship hit a rocky reef, took on water and turned over just outside the port of the tiny island of Giglio off Tuscany. Divers and searchers have been combing the half-submerged ship, from passenger cabins to elevators to the decks where many of the 4,200 passengers and crew gathered during the delayed and frantic evacuation. Many jumped into the sea when lifeboats were unable to be launched because of the ship's tilt. Even before the latest bodies were found, eight removed in recent weeks were awaiting official identification. Weeks in the water badly decomposed the remains, and forensic authorities have used DNA sampling to try to identify them. A crew member from India and several passengers, including an elderly U.S. couple and others from Italy and Germany, are among those listed as missing or unidentified.